ethics in information technology, fourth edition chapter 10 ethics of it organizations

Ethics in Information Technology, Fourth Edition

Chapter 10Ethics of IT Organizations

Objectives

• As you read this chapter, consider the following questions:– What are contingent workers, and how are they

employed in the information technology industry?– What key ethical issues are associated with the use

of contingent workers, including H-1B visa holders and offshore outsourcing companies?

– What is whistle-blowing, and what ethical issues are associated with it?

Ethics in Information Technology, Fourth Edition 2


Objectives (cont’d.)

– What is an effective whistle-blowing process?– What measures are members of the electronics

manufacturing industry taking to ensure the ethical behavior of the many participants in their long and complex supply chains?

– What is green computing, and what are organizations doing to support this initiative?

Key Ethical Issues for Organizations

• Ethical topics are pertinent to organizations in the IT industry and organizations that make use of IT– Use of nontraditional workers– Whistle-blowing– Green computing– ICT code of ethics


The Need for Nontraditional Workers

• Bureau of Labor Statistics (BLS) forecast– Network systems and data communications analysts

will be 2nd fastest growing occupation from 2008-2018

– Employment of computer software engineers will grow 34%

• Concern about a shortfall in the number of U.S. workers to fill these positions

• Several IT positions in the top-ten paid majors for 2010-2011 bachelor’s degree graduates


The Need for Nontraditional Workers (cont’d.)

• Long-term shortage of IT workers– Employers turning to nontraditional sources

• Sources include: – Contingent workers– H-1B workers– Outsourced offshore workers

• Ethical decisions about whether to:– Recruit new/more workers from these sources – Develop their own staff to meet their needs



Contingent Workers

• Contingent work is a job situation in which an individual does not have an explicit or implicit contract for long-term employment

• Contingent workers include: – Independent contractors– Temporary workers through employment agencies– On-call or day laborers– On-site workers provided by contract firms

• Needed for pronounced IT staffing fluctuations

• Workers hired for the life of the project only


Contingent Workers (cont’d.)

• Sources– Temporary agencies– Employee leasing– Consulting organizations

• Firms that provide temporary help: – Recruit, train, and test their employees in a wide

range of job categories and skill levels – Assign them to clients

9Ethics in Information Technology, Fourth Edition



• Employee leasing– Business outsources all or part of its workforce to a

professional employer organization– Subject to special regulations regarding workers’

compensation and unemployment insurance

• Coemployment relationship– Two employers have actual or potential legal rights

and duties with respect to the same employee or group of employees


• Advantages of using contingent workers– Business does not pay for benefits– Can continually adjust the number of contingent

workers to stay consistent with its business needs– Does not customarily incur training costs




• Disadvantages of using contingent workers– Workers may lack a strong relationship with the firm

• Low commitment to the company and its projects

• High turnover rate

– Workers gain valuable practical experience working within a company’s structure and culture

• Lost when workers depart at the project’s completion



• When deciding to use contingent workers:– Recognize the trade-off between:

• Completing a single project quickly and cheaply

• Developing people in the organization

– When staffing is truly temporary:• Use of contingent workers is a good approach

– Think twice about using contingent workers: • When they are likely to learn corporate processes and

strategies that are key to the company’s success

– Worker’s next assignment may be with major competitor



• Deciding when to use contingent workers– Can raise ethical and legal issues– Potential liability for:

• Withholding payroll taxes

• Payment of employee retirement benefits

• Payment of health insurance premiums

• Administration of workers’ compensation



• Deciding when to use contingent workers (cont’d.)– Can be viewed as permanent employees by:

• Internal Revenue Service

• Labor Department

• State workers’ compensation agency

• State unemployment agencies

– Vizcaino v. Microsoft lawsuit• Deciding factor is degree of control company

exercises over employees

• Employers must exercise care in the treatment of contingent workers


H-1B Workers

• Temporary work visa– U.S. Citizenship and Immigration Services (USCIS) – For people who work in specialty occupations

• H-1B workers– Meet critical business needs – Have essential technical skills and knowledge not

readily found in the U.S.– Employers must pay H-1B workers the prevailing

wage for the work being performed


H-1B Workers (cont’d.)

• Maximum continuous period of six years– After six years, the foreign worker must remain

outside the United States for one year before another H-1B petition can be approved

• Continued use of H-1B workers– Symptom of a larger, more fundamental problem– U.S. not developing sufficient IT employees



• Top five outsourcing countries– India – China– Canada– Philippines– Korea

• Federal cap of 65,000 for number of H-1B visas– Applies only to certain IT professionals– Large number of workers are exempt from cap



• English as a second language– Workers who are not fluent in English:

• May find it difficult and uncomfortable to participate

• May create their own cliques

• May stop trying to acclimate

• Can hurt a project team’s morale and lead to division

• Managers and coworkers should:– Strive to help improve H-1B workers’ English skills

and cultural understanding– Be sensitive to workers’ heritage and needs



• H-1B application process– Employer making job offer must also offer

sponsorship– Application has two stages

• Labor Condition Attestation (LCA)

• H-1B visa application

– If H-1B are more than 15% percent of company’s workforce:

• Must prove that it first tried to find U.S. workers

• Must prove not hiring H-1B after laying off similar U.S. worker


• American Competitiveness in the Twenty-First Century Act (2000)– Allows current H-1B holders to start working for

employers as soon as their petitions are filed

• Using H-1B workers instead of U.S. workers– Good for short-term hiring– Long-term hiring

• Lessens incentive to educate and develop U.S. workforces

• Does nothing to develop strong core of permanent U.S. IT workers needed in future




• Potential exploitation of H-1B workers– Salary abuse by unethical companies– Some H1-B workers are paid $10,000 to $30,000

less than U.S. workers in the same job– Visa Reform Act (2004)

• Defined a modified wage-rate system

– At end of the six-year visa term:• If no green card, firm loses worker

• Suddenly unemployed worker must return home

B - 1 Visa Controversy

• B-1 visitor visa for people who wish to enter U.S. temporarily:– For pleasure or medical treatment– To travel for short periods of time to consult with

business associates; attend convention or conference; negotiate a contract; or install or maintain machinery

• B-1 visa faster, easier, and cheaper to obtain– Lot of gray area in the use of B-1 visas


Outsourcing

• Outsourcing– Approach to meeting staffing needs– Long-term business arrangement

• Company contracts with an outside organization that has expertise in providing a specific function

• Rationale– Coemployment legal problems are minimal– Lower costs– Obtain strategic flexibility– Keep staff focused on core competencies



Offshore Outsourcing

• Variation of outsourcing– Services provided by an organization whose

employees are in a foreign country

• Companies reduce labor costs

• Increasing in IT industry

• As key processes move offshore, U.S. IT providers are forced to lower prices

• Common to use offshore outsourcing for major programming projects

Offshore Outsourcing (cont’d.)




• Pros and cons of offshore outsourcing– Low wages

• Demand for offshoring driving up salaries

– Dramatically speeds up development efforts• Make progress on a project around the clock

– Can also result in new expenses• Additional time to select an offshore vendor

• Additional costs for travel and communications

– Same ethical issues as H1-B and contingent workers– Difficulty of communications over long distances and

differences in culture and language



• Strategies for successful offshore outsourcing– Expertise in technologies involved in the project– Project manager speaks native language of

employer– Large staff available– State-of-the-art telecommunications setup– High-quality on-site managers and supervisors


Whistle-Blowing

• Effort to attract public attention to a negligent, illegal, unethical, abusive, or dangerous act by a company

• Whistle-blower– Usually has personal or special knowledge– Risks own career – Might even affect lives of friends and family– Must choose between protecting society and

remaining silent


Whistle-Blowing (cont’d.)

• Protection laws allow employees to alert authorities to employer actions that are unethical, illegal, or unsafe or that violate specific public policies– No comprehensive federal law– Each law has different:

• Filing provisions

• Administrative and judicial remedies

• Statutes of limitations



• False Claims Act (“Lincoln Law”)– Enacted during the Civil War– Enticed whistle-blowers to come forward – Offered a share of the money recovered

• Qui tam provision allows private citizen to file in name of government

• Violators are liable for three times the dollar amount the government is defrauded

• Provides strong whistle-blower protection• Complexity requires advice of an attorney


• Whistle-blower protection for private-sector workers– Many states, not all, have laws that prevent workers

from being fired because of an employee’s participation in “protected” activities

• Whistle-blowers can file claims against their employers for retaliatory termination

• Whistle-blowers are entitled to jury trials

• If successful at trial, can receive punitive damage awards



• Dealing with a whistle-blowing situation– Assess the seriousness of the situation– Begin documentation– Attempt to address the situation internally– Consider escalating the situation within the company– Assess implications of becoming a whistle-blower– Use experienced resources to develop action plan– Execute the action plan– Live with the consequences


Green Computing

• To manufacture truly “green” products, companies must:– Produce product that requires less electricity– Reduce the amount of hazardous materials used– Increase amount of reusable or recyclable materials– Help consumers dispose of their products in an

environmentally safe manner at the end of the product’s useful life


Green Computing (cont’d.)

• Personal computers and cell phones contain thousands of components composed of many different materials– Some harmful to humans and environment– Workers along the entire supply chain at risk– Users can also be exposed to these materials



• EPEAT (Electronic Product Environmental Assessment Tool)– Enables purchasers to evaluate, compare, and

select electronic products• Based on a total of 51 environmental criteria

• Products are ranked in three tiers of environmental performance

• European Restriction of Hazardous Substances Directive– Restricts use of many hazardous materials in

computer manufacturing



• How to safely dispose of obsolete computers– Many states have recycling programs– Some manufacturers have developed programs

• Greenpeace environmental activist organization– Issues quarterly ratings of manufacturers according

to the manufacturers’ policies on toxic chemicals, recycling, and climate change

• Manufacturers have long way to go to meet the high standards


ICT Industry Code of Conduct

• Electronic Industry Citizenship Coalition (EICC) – Promotes common code of conduct for ICT industry– Focuses on the areas of:

• Worker safety and fairness

• Environmental responsibility

• Business efficiency

– Coalition membership is voluntary

• Code of conduct defines performance, compliance, auditing, and reporting guidelines across five areas of social responsibility


ICT Industry Code of Conduct (cont’d.)

• Guiding principles of social responsibility– Labor

• Must uphold the human rights of workers

– Health and safety• Must provide safe and healthy work environment

– Environment• Adverse effects minimized

– Management system• Ensures compliance with code

– Ethics• Must uphold the highest standards of ethics



Summary

• Contingent workforce includes: – Independent contractors– Temporary workers through employment agencies– On-call or day laborers– On-site workers provided by contract firms

• Outsourcing– Long-term business arrangement – Contract for services with outside organization – Expertise in providing a specific function

Summary (cont’d.)• Whistle-blowing

– Effort to attract public attention to negligent, illegal, unethical, abusive, or dangerous acts by company

– Whistle-blowing process• Assess the seriousness of the situation

• Begin documentation

• Attempt to address the situation internally

• Consider escalating the situation within the company

• Assess the implications of becoming a whistle-blower

• Use experienced resources to develop an action plan

• Execute the action plan

• Live with the consequencesEthics in Information Technology, Fourth Edition 44

Summary (cont’d.)

• Green computers– Use less electricity– Include fewer hazardous materials– Contain reusable or recyclable material

• Manufacturers must help consumers:– Dispose of products in an environmentally safe

manner at the end of the product’s useful life

• EPEAT (Electronic Product Assessment Tool)– Purchasers can evaluate, compare, and select– Based on 51 environmental criteria


ethics in information technology, fourth edition chapter 10 ethics of it organizations

Documents

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